Midamar sees opportunity for meat exports to Indonesia

CEDAR RAPIDS — A recent visit by Indonesian officials to six meat processing facilities in Iowa, Minnesota and New York could mean a sharp increase in exports handled by an Eastern Iowa business.

Bill Aossey, president of Midamar Corp., 1105 60th Ave. SW, hosted the inspectors who will decide whether the plants are approved for exports to Indonesia. Aossey said the facilities must meet international safety and sanitation standards as well as strict Halal religious processing guidelines for acceptance by the nation of more than 200 million Muslims.

“We believe we are in a prime position to be one of the key premier exporters to Indonesia,” Aossey said. “In 1980, we helped former Gov. (Robert) Ray arrange the first trade mission to Indonesia, Malaysia and Singapore because we had a relationship with Indonesian and Malaysian students. At one time, there were between 400 and 500 Indonesian and Malaysian students at Iowa State University in Ames.”

Indonesia and Malaysia are two of the fastest-growing export markets for the United States. Some economists forecast that Indonesia, with income from natural gas, oil, timber and mineral exports, could become the world’s seventh-largest economy before 2050.

“President Obama has set as an objective the doubling of exports to Indonesia over the next five years for the U.S. to remain competitive,” Aossey said. “We hope to get two turkey plants, two beef plants, a chicken plant and a duck plant certified for exports to Indonesia.

“We expect that Indonesia, with a population of more than 250 million, will become a protein importer.”

Beef and poultry were the fastest-growing exports from the U.S. to Indonesia in 2008, soaring 1,826 percent to $9.8 million in 2008 from the previous year, according to the U.S. Department of Commerce. Aossey said the U.S. must be price competitive with Australia, Argentina and Brazil to capture a significant share of Indonesia’s protein import market.

“U.S. product is more expensive than beef from Australia and New Zealand and our poultry is more expensive than the poultry from Brazil,” Aossey said. “The thing that we think will make U.S. protein more price competitive in the future is our grain production. No other country can provide a feed source like the United States.

“No other country has a pork, beef or poultry industry the size of the United States. Australia, New Zealand and Argentina are very heavy in beef and lamb, but they don’t have pork or poultry.

“As their beef prices go up, our beef prices will remain fairly stable because American consumers will switch to another form of protein. We think the pricing gap will continue to narrow and our protein exports will grow.”

Aossey’s projections about protein demand by Indonesia and other emerging economies were echoed last month by William Kasriel. senior vice president and director of economic researchat Northern Trust Co. in Chicago, in comments at Hills Bank & Trust Co.’s annual economic outlook luncheon.

“As the household incomes of these emerging markets rise, they’re going to buy things that they always wanted, but couldn’t afford,” Kasriel said. “One of things they’re going to want to buy is protein. That means that the farmers in this area are going to be very busy producing protein for the rest of the world.”